Fort Walton Beach Council agenda — 09-19-12 special budget-second ph — reading text

801, 950 and is $ 597K or 3. 4% less than the prior year. Full -time equivalent ( FTE) positions total 289. 95 compared to 298. 40 last year. The City' s 2012 assessed taxable value is $ 1. 114 billion, a 3. 3% decrease. The budget is predicated on maintaining a millage rate of 4. 5383 mills. BUDGET ISSUES & CHALLENGES Economic indicators - somewhat useful for evaluating the framework within which the City of Fort Walton Beach operates - are mixed, but seem to indicate an economic recovery underway. i>I Ow I Municipal Cost aI Consumer Confidence a It Consumer Price Leading Economic Index Index Index Index Arrow indicates direction of performance during past year; Color denotes if change has a positive (green) or negative ( red) impact.* The Consumer Price Index ( CPI) —prepared by the US Bureau of Labor Statistics and the most widely used gauge of inflation — is 1. 7% higher than a year ago. The Municipal Cost Index — prepared by American City & County to show the effects of inflation on the cost of providing municipal services — is 1. 2% higher than a year ago. The Consumer Confidence Index — prepared by The Conference Board based on a representative sample of US households — is 6. 0% higher than a year ago ( though it has declined each of the past four months). The Leading Economic Index — also prepared by The Conference Board and designed to signal turning point patterns in economic data — is 17. 1% lower than a year ago. Says Ken Goldstein, economist at The Conference Board: " The U. S. economy is growing very slowly. The Leading Economic Index is pointing to no strengthening over the next few months, as the economy continues to sail through strong headwinds domestically and internationally." The City' s revenue sharing funds from the State suffer when discretionary spending decreases in a weak economy. Economic challenges are coupled with fiscal constraints previously imposed by the Florida Legislature and voters. Legislation passed in June 2007 caps property tax revenues based on the majority vote of the governing body and a Constitutional amendment passed by Florida voters in January 2008 provides additional property tax exemptions and assessment caps. For the fifth consecutive year, the City continues to navigate an environment of decreased City of Fort Walton Beach, FL City Manager' s Budget Message revenues, coupled with a desire to maintain the same level of programs and services. City Council is to be commended for its prudent approach: long -term solutions, ` right- sizing' the organization, and only using reserves for non -recurring expenses. General Fund Budget vs. Inflation Citywide Budget vs. Inflation 22 42 21 40 20 38 c 0 19 36 18 34 17 16 32 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Compared to five years ago, General Fund expenditures are down 12. 7% while the municipal cost index — which illustrates the effects of inflation on the cost of providing municipal services Citywide, expenses have declined 8. 3% compared to the MCI' s 4. 1% increase. is up 4. 1 %. TOP 3 BUDGET ISSUES Current Year - FY 2012 -13 Prior Year - FY 2011 -12 Pension Contributions $ 146,744 Pension Contributions $ 336, 425 City contributions per actuaries: 27.91% general, City contributions per actuaries: 25. 55% general, 36. 7% police officers, 33.6% re hters. 30. 1% police officers, 29. 1% fireflghters. Property Taxes $ 149,078 Property Taxes $ 277, 582 Assessed value decrease of $38M or 3. 0% due to Assessed value decrease of $61M or 5. 0% due to declining property values; Millage rate unchanged. declining property values; Millage rate unchanged. 839, 549 Staffing Changes $ 767 Staffing Changes $ FTE' s reduced from 298. 4 to 289. 95; eight sworn Three additional CRA police officers offset by other personnel changes. police officers among positions eliminated. Pension Contributions The City is required to maintain its three defined benefit pension plans in a fiscally sound manner. Investment earnings and employee /employer contributions comprise the plans' income. General employees and police officers contribute 5% of wages and firefighters contribute 6. 6% of wages into their respective plans. The City' s annual contribution as a percent of payroll is based on actuarially determined contribution levels. The City' s contribution to the General Employees defined benefit plan is budgeted at $ 13M, unchanged from the prior year. The City' s contribution to the Police Officers plan is budgeted at 738K, a decrease of $ 6K or 0. 8% due to position eliminations offsetting the required contribution increase. The City' s contribution to the Firefighters plan is budgeted at $ 676K, an increase of $85K or 12. 7% to compensate for investment losses. Property Taxes The City' s 2012 gross taxable property value for operating purposes is $ 1. 114 billion, a decrease from the 2011 final gross taxable property value of $1. 152 billion. The of $37. 8 million or 3. 3% budget is predicated on maintaining a millage rate of 4. 5383, which generates $ 149K less property tax revenue than the prior year due to decreases in property values. One mill equals $ 1 per $ 1000 of taxable property value. City of Fort Walton Beach, FL City Manager' s Budget Message Property taxes levied by the City comprise $ 4. 8M or 14. 3% of total revenues and contribute to 24% or $ 4. OM of General Fund revenues and 57% or $ 760K of Community Redevelopment Agency ( CRA) Fund revenues. Funding from County property taxes comprises $ 551K or 42% of CRA Fund revenues. Property tax revenues are allocated to the CRA Fund based on the growth in assessed value from the base year ( i. e. year of CRA designation). llssss Assessed Value ( millions) --*-- Ad Valorem Taxes ( millions) 1, 500 7 6 1, 200 5 900 4 3 600 dt 2 300 1 2003 -04 2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12 2012 - 13 Personnel General Fund revenues are down $ 2. 8M or 14. 1% from their pre -Great Recession level ( i.e. FY 2008) and cuts have been made to recreation, community development, right -of -way maintenance, and other " non- essential" areas in previous years. Since the police department comprises 30% of the General Fund budget, reductions in this department were no longer avoidable. The number of sworn officers has been reduced from 46 to 38. To minimize the impact to patrol operations and high -priority call response time, the department will transition from three 11 -hour overlapping shifts with 5 officers per shift to two 24 -hour shifts with 7 officers per shift. The investigative unit will be reduced from 9 to 4, supplemented by participation in a regional task force. Two administrative positions and a communications officer were also eliminated. The number of full -time equivalent ( FIE) positions in the City totals 289.95, compared to 298. 40 in the previous year. The following changes were made: a. Eliminations ( due to vacancies & attrition) — police admin coordinator, five police officers, police support services supervisor, recreation center manager, recreation center manager ( 0. 73 FTE) b. Eliminations ( reduction in force) —communications officer, three police sergeants c. New Positions — planning /permit/ grant tech ( 0.70 FTE), recreation specialist ( 0. 45 FTE), recreation specialist (0. 14 FTE), recreation supervisor (0. 75 FTE), sewer service worker I d. Reclassifications — inventory specialist 0.75 FTE to property administratorI FTE, fleet staff assistant from 0.75 to 0. 88 FTE,